Jobs at risk if Qantas freed from Sale Act's 'shackles'

James Massola, Matt O'Sullivan

Government plans to unshackle Qantas from foreign ownership restrictions could clear the way for the airline to shift jobs overseas and outsource maintenance.

As Prime Minister Tony Abbott signalled his determination to remove the government-imposed "ball and chain" from Qantas, analysts from brokerage firm CLSA said the main benefit to the airline in altering the Qantas Sale Act was that it would allow it to slash costs by sending more work overseas.

Qantas on Thursday will unveil its biggest loss since it was privatised almost two decades ago. In an attempt to slash $2 billion in costs over the next three years, chief executive Alan Joyce will detail measures expected to include the axing of as many as 5000 jobs from its 33,000-strong workforce.

Coalition sources said on Wednesday night that the government would not immediately unveil assistance measures in response to Qantas. They said a debt guarantee, which will allow the airline access to cheaper finance, was still the most likely short-term measure.

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The Abbott government will struggle to steer change to the Sale Act through either the present Senate dominated by Labor and the Greens or the next one that will sit from July 1.

Mr Abbott brushed aside suggestions of a "secret deal" between the government and Qantas that could see a guarantee in exchange for assurances about maintenance workers' jobs staying in Australia.

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"We want to ensure that Qantas management, as far as is humanly possible, doesn't have any government-imposed ball and chain around their ankles and that's the problem with the Sale Act,'' he said. ''It is a significant restriction on Qantas' freedom of manoeuvre and that's why the government is considering legislation to establish a level playing field in this area.''

Opposition transport spokesman Anthony Albanese called on Mr Abbott and Transport Minister Warren Truss to clarify what assistance would be handed to the airline and to protections for Australian jobs. Mr Albanese said Labor supported maintaining the provisions of the Sale Act because it ensured maintenance and other jobs stayed in Australia and ensured regional areas were served by the national carrier.

"It's about time that Tony Abbott and Warren Truss said what their plan is for Qantas instead of sitting back while threats are being made to the job security of these people who work at Qantas," he said.

In a hard-hitting report, CLSA analysts said they were sympathetic to the airline because of the foreign ownership restrictions. ''[But] government help would be palliative not panacea and clearly needs improvements driven by Qantas itself,'' they said.

They said the removal of the act could be a ''game-changer'' for reducing Qantas' costs.

Regional Express, the country's largest independent regional airline, also launched a scathing attack on Qantas' attempts to have the government guarantee its debt.

''There is a lot of things Qantas could do for itself to solve some of its problems, rather than just going to the government and saying please guarantee our debt,'' the airline's deputy chairman John Sharp said.